Definition ∞ MLR Registered Firms are businesses officially registered with a national authority to comply with Money Laundering Regulations. In the context of digital assets, these firms, which include cryptocurrency exchanges, custodians, and certain DeFi service providers, must adhere to strict anti-money laundering (AML) and counter-terrorist financing (CTF) requirements. Registration involves implementing robust internal controls, conducting customer due diligence (CDD), and reporting suspicious transactions to combat illicit financial activities. This registration is mandatory for operating legally in many jurisdictions.
Context ∞ The discussion surrounding MLR Registered Firms is central to the global effort to regulate the digital asset space and prevent its misuse for illegal purposes. Key debates address the scope of these regulations for truly decentralized protocols and the challenges of applying traditional financial rules to novel digital technologies. A critical future development is the harmonization of AML/CTF standards across different jurisdictions, providing greater clarity and consistency for firms operating internationally.
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